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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
77
In April 2009, the FASB issued FSP No. FAS 107-1 and Accounting Principles Board (“APB”) Opinion No.
28-1, “Interim Disclosures about Fair Value of Financial Instruments.” FSP No. FAS 107-1 and APB Opinion No.
28-1 amends FASB Statement No. 107, “Disclosures about Fair Value of Financial Instruments,” to require
disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial
statements. This FSP also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those disclosures
in interim financial statements. FSP No. FAS 107-1 and APB Opinion No. 28-1 does not require disclosures for
earlier periods presented for comparative purposes at initial adoption. This FSP becomes effective for us on June
30, 2009. We do not currently anticipate that this FSP will have a material impact on our consolidated financial
statements upon adoption.
In April 2009, the FASB issued FSP No. FAS 157-4, “Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not
Orderly.” FSP No. FAS 157-4 provides additional guidance for estimating fair value in accordance with SFAS No.
157 when the volume and level of activity for the asset or liability have significantly decreased. Additionally, this
FSP provides guidance on identifying circumstances that indicate a transaction is not orderly. Retrospective
application of this FSP to a prior interim or annual reporting period was not permitted. This FSP becomes effective
for us on June 30, 2009. We do not currently anticipate that this FSP will have a material impact on our
consolidated financial statements upon adoption.
2. Acquisitions and Investment
In 2009, we made the following acquisition:
−On May 21, 2008, we acquired McQueary Brothers Drug Company (“McQueary Brothers”) of Springfield,
Missouri for approximately $190 million. McQueary Brothers is a regional distributor of pharmaceutical,
health and beauty products to independent and regional chain pharmacies in the Midwestern U.S. This
acquisition expanded our existing U.S. pharmaceutical distribution business. The acquisition was funded with
cash on hand. Financial results for McQueary Brothers have been included within our Distribution Solutions
segment since the date of acquisition.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the
acquisition date:
(In millions)
Accounts receivable $ 37
Inventory 41
Goodwill 126
Intangible assets 67
Other assets 11
Accounts payable and other liabilities (60)
Deferred tax liability (32)
Net assets acquired, less cash and cash equivalents $ 190
Approximately $126 million of the purchase price allocation has been assigned to goodwill, which primarily
reflects the expected future benefits from synergies to be realized upon integrating the business. Included in the
purchase price allocation are acquired identifiable intangibles of $61 million representing a customer
relationship with a useful life of 7 years, a trade name of $2 million with a useful life of less than one year and a
not-to-compete agreement of $4 million with a useful life of 4 years.